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Why is Closing stock valued at lower of ...

Why is Closing stock valued at lower of cost or net realisable value (market value) ?

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Closing stock is valued at lower of cost or net realisable value (market value) because of the Prudence Concept of accounting, whereby anticipated losses are accounted while anticipated profits are not.
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TS GREWAL-ADJUSTMENTS IN PREPARATION OF FINANCIAL STATEMENTS -Higher order thinking skills
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  3. Why are Prepaid Expenses segregated from current year's expenses and t...

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  5. Unearned Incomes is credited to Profit and Loss Account. Do you agree ...

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  6. If Depreciation reduces profit, reduces Book value of assets and also ...

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  8. Under which accounting concept is Provision for Doubtful Debts made ?

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  9. Provision for Discount on Debtors in calculated before deducting Provi...

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  10. By providing for discount on debtors, which accounting concept is foll...

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  11. At what value are the goods taken for personal use recored in the book...

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  12. At what value are the goods distributed as sample accounted and why?

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  13. Rahul of Chennai sold goods to Reva of Channai of Rs 10,000. Whatever ...

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  14. Lalit of Delhi purchased goods of Rs 20,000 from Mehar of Kanpur. Whet...

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  15. Is CGST and SGST or IGST paid on puchase input GST or output GST? Why...

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  16. Why is Closing stock valued at lower of cost or net realisable value (...

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  17. Why Provision of Outstanding Expenses is required ?

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  18. Why are Prepaid Expenses segregated from current year's expenses and t...

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  19. Why is Accrued Income credited to the Profit and Loss Account and show...

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  20. Unearned Incomes is credited to Profit and Loss Account. Do you agree ...

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